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Tax Administration: IRS Can Improve Its Productivity Measures by Using Alternative Methods

GAO-05-671 Published: Jul 11, 2005. Publicly Released: Jul 19, 2005.
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Highlights

In the past, the Internal Revenue Service (IRS) has experienced declines in enforcement productivity as measured by cases closed per Full Time Equivalent. Increasing enforcement productivity through a variety of enforcement improvement projects is one strategy being pursued by IRS. Evaluating the benefits of different projects requires good measures of productivity. In addition, IRS's ability to correctly measure its productivity has important budget implications. GAO was asked to illustrate available methods to better measure productivity at IRS. Specifically, our objectives were to (1) describe challenges that IRS faces when measuring productivity, (2) describe alternative methods that IRS can use to improve its productivity measures, and (3) assess the feasibility of using these alternative methods by illustrating their use with existing IRS data.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Internal Revenue Service The Commissioner of Internal Revenue should put in place a plan for introducing wider use of alternative methods of measuring productivity, such as those illustrated in this report, taking account of the costs of implementing the new methods.
Closed – Implemented
IRS has tasked its Office of Program Evaluation and Risk Analysis (OPERA) with responding to our recommendation. The office formed a working group that has investigated methods and data used to measure productivity at IRS and begun outreach efforts to IRS divisions as part of their plan to improve productivity measurement. They have also met several times with GAO to update us on their progress. They noted that their effort on productivity measurement is part of IRS's effort to improve resource allocation throughout the agency.

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Topics

Evaluation methodsInternal controlsPerformance measuresProductivity in governmentQuality controlStatistical dataStatistical methodsStrategic planningTax administration systemsWork measurement